Peach association to major retailer: Buy U.S.-grown


Issue Date: September 21, 2011
By Christine Souza
U.S. Canned Peach Imports from China
Source: California Canning Peach Association
Illustration/Karin Bakotich

Having seen their market share eroded by imports from China, California canning-peach farmers are trying to stem the tide, one retailer at a time.

This summer, California Canning Peach Association President and CEO Rich Hudgins noticed canned cling peaches from China on Target store shelves, being sold under its Market Pantry brand. As a result, he decided to approach the marketing powerhouse about buying peaches from California.

"Some of our growers don't have a home for their peaches any longer. Domestic production is being displaced by Chinese imports, so for every Target out there that means a few less California peach growers will remain in this industry," Hudgins said. "There are plenty of peaches grown in California by lots of small, multi-generation, family farmers. I saw this as an opportunity for Target to support local communities that rely on agriculture."

Target is not the only widely known U.S. retailer that purchases cling peach imports, but it is the most visible in the Central Valley where peaches grow, so it makes sense to draw attention to its sourcing decisions on food, Hudgins added.

The market share for California cling peaches has been hurt by increased imports, especially from China, which supplies 68 percent of canned peach imports to the United States, Hudgins said. The market share for Chinese imports has nearly doubled in the past seven years, going from approximately 10 percent to 18 percent of total domestic sales. The gain comes at the expense of California cling peach growers, who produce nearly 80 percent of the U.S.-grown canned and bottled peach supply, Hudgins added.

In a July 29 letter encouraging Target to buy processed peaches from California for its Market Pantry brand, Hudgins wrote, "In addition to the on-farm jobs at risk, the peach processing facilities in California employ thousands of workers who shop and contribute to the local economy."

Hudgins also reminded Target about its commitment to reduce its carbon footprint and greenhouse gas emissions: "It is our hope that you reconsider your decision to source products from over 6,000 miles away in China and carefully weigh issues such as quality, food safety, pesticide use and raw product traceability."

Annette Miller, Target Corp. senior vice president, responded on Aug. 16, citing the company's system of regularly reviewing different vendors and services for its private label products.

"Our goal is to offer the guest the best combination of quality and price. Although our canned peaches are sourced from China, we regularly offer U.S.-grown peaches in our fresh produce area. Going forward, we will continue to evaluate all options for our products," Miller wrote.

Hudgins has offered to arrange a tour of facilities operated by each of the state's three canners for Target's buyers, so that the company can evaluate the quality of California cling peaches. He also provided a retail price comparison between Target's Market Pantry sliced peaches from China at $1.27, and a similar, California-grown product at Wal-Mart, which sold for 99 cents.

Roberta Cook, a University of California Cooperative Extension marketing specialist in Davis, said Wal-Mart "may be taking a lower margin and buying product at a lower cost than Target." Private label sales in grocery stores have been growing for some time, Cook said, but have really increased during the economic downturn since 2008.

She noted that the California cling peach business has faced declining per capita consumption due to increased foreign competition and changing consumer preferences.

"When you are talking about processed items, if another country can produce it a lot cheaper than you, then you will be vulnerable to competition. And consumer preferences have moved towards fresh. So they are hit by both factors," Cook said.

California pear growers also express concerns about canned pears being displaced by imported products.

"A lot of times, the product from China isn't even the same as ours, even though it is marketed the same," California Pear Advisory Board Executive Director Chris Zanobini said. "It is always a concern by the canned fruit industry when you have a dominant chain marketing something that could be perceived as being 'home grown.'"

Cling peach grower Sonny Kalkat of Yuba City is one of 30 who did not have a cannery contract for their entire crop this year. He said he was able to harvest all of his peaches due to an overall shortfall, but that the uncontracted peaches went to juice and alternative products where Kalkat earns substantially less.

Regarding the peach association's efforts to establish communications with Target, Kalkat said he believes it is important to keep the dialogue open.

"Target could say, 'Look, this is where China is, would you mind meeting this price?' I'm sure U.S. canners do not want to lose market share, especially to China," Kalkat said. "Sometimes it is just a lack of communication. If there was some dialogue and some negotiation, it might work for both parties."

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.